Gold attracts some dip-buying, but there is no follow-through.
The price of gold (XAUUSD) draws some dip-buyers on Monday around the $2,689 mark, but there is no follow-through and it stays below a one-month high during the first part of the European session.
Fed will halt its rate-cutting cycle constrain gains for the XAUUSD.
A major issue operating as a headwind for the safe-haven precious metal amid the growing agreement that the Federal Reserve (Fed) will delay its rate hike is the generally upbeat tone surrounding the equity markets cycle of rate-cutting later this month.
Amid a US bank holiday in honor of Martin Luther King Jr. Day, traders also appear hesitant and choose to postpone placing directional bets until after US President-elect Donald Trump’s inaugural address later today. Meanwhile, wagers that the Fed will cut borrowing costs twice this year in response to indications of slowing US inflation have failed to help the USD build on Friday’s gains and provide support for the non-yielding yellow metal.
Daily Market Update: Gold price lacks a clear intraday direction amid conflicting fundamental indicators.
Because of speculation that the Federal Reserve might not rule out future interest rate cuts in 2025, the price of gold saw advances for the third straight week.
The US Producer Price Index (PPI) and Consumer Price Index (CPI), which were announce last week, showed that inflationary pressures in the US decreased in December, easing such concerns.
Furthermore, Fed Governor Christopher Waller stated on Thursday that the US central bank will be able to lower interest rates sooner rather than later because inflation is forecast to continue to decline.
Traders are now eagerly awaiting US President-elect Donald Trump’s inaugural speech.
The safe-haven XAUUSD supported by worries over US President-elect Donald Trump’s disruptive trade tariffs and the US dollar’s inability to benefit on Friday’s good advance.
The optimistic risk tone still supported by the Israel-Hamas ceasefire agreement and expectations that Trump may loosen restrictions on Russia in return for an agreement to end the war in Ukraine.
Additionally, the US central bank anticipated to halt its round of rate cuts later this month due to concerns that Trump’s plans may increase inflation and limit the non-yielding yellow metal.
Ahead of Trump’s inaugural speech later Monday and a US holiday in honor of Martin Luther King Jr. Day, traders may also decide not to make aggressive directional bets.
